If there are multiple DirectShow filters available that can do the same task (such as decoding a MPEG-2 video), the system needs a way of knowing which filter to use. Thus each DirectShow filter is registered with a merit value. This way the system chooses the filter with the highest merit.
Giving ffdshow a higher merit can override other competing filters.

If you allow ffdshow to process raw video or uncompressed audio, it can connect to the output of itself. This would create an infinite loop however. To avoid it, the default setting “only one - check all filters in graph” is recommended.
If you (or your application) create the filter graph manually and you need multiple instances of ffdshow, you may have to change this option.
If you don't want to use ffdshow at all, choose “none - disabled”. This option can be set separately for audio and video.

There are some DirectShow applications (mainly badly written games) that are not compatible with ffdshow. If you have trouble with specific applications, enable this setting and add the executable's file name to the list either by entering it directly or by clicking on “Edit”.
Windows Explorer (explorer.exe) uses ffdshow to create thumbnail previews. Therefore the Explorer process has to keep ffdshow (ffdshow.ax) loaded in memory. Unfortunately, this makes a reboot necessary when updating ffdshow. So if you update ffdshow very frequently, you may want to add explorer.exe to this list.